The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) Created the Transportation

INTRODUCTION

The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) created the Transportation Enhancement (TE) program. Ten percent of the funds within the Surface Transportation Program (STP) of the Federal-aid Highway Program are reserved for TE program. Subsequent Federal legislation has made minor changes in the TE program and it remains a permanent part of the Federal-aid Highway Program. Projects implemented under the TE program must be one or more of the following activities:

1. Provision of facilities for pedestrians and bicycles
2. Provision of safety and educational activities for pedestrians and bicycles
3. Acquisition of scenic easements and scenic or historic sites including historic battlefields
4. Scenic or historic highway programs including the provision of tourist and welcome center facilities
5. Landscaping and other scenic beautification
6. Historic preservation
7. Rehabilitation and operation of historic transportation buildings, structures, or facilities including historic railroad facilities and canals
8. Preservation of abandoned railway corridors including the conversion and use thereof for pedestrian or bicycle trails
9. Inventory, control and removal of outdoor advertising
10. Archaeological planning and research
11. Environmental mitigation to address water pollution due to highway runoff or reduce vehicle-caused wildlife mortality while maintaining habitat connectivity
12. Establishment of transportation museums

A project to be funded in the TE program must meet two basic conditions:

1. The proposed action must be one of the activities listed above, and
2. The proposed action must be related to the surface transportation system.

All of the approved TE applications are reviewed to assure that each project meets these requirements. As the projects are developed, the proposed work is reviewed to assure that the work to be completed with federal TE funds meets the requirements of the program.

All TE projects must meet the normal requirements of the Federal-aid highway program as if it were a typical highway project. Due to the modest scale of most TE projects, simplified procedures are used to satisfy many of the requirements. Prompt attention to each of the necessary steps will assure that each project is completed in a timely manner.

Federal funds available under the TE program will pay for up to 80 percent of the total project cost. The Sponsor’s local match must be at least 20 percent of the total project cost. The local match may be cash, in-kind services, or donated services, materials, or real property. The federal TE funding award may be used in any or all of the three project phases of preliminary engineering, right-of-way, and construction. Most Sponsors use their own funds to complete the preliminary engineering and right-of-way phases and use the TE funds for construction. This approach simplifies the project management process by reducing the number of administrative actions that need to be taken.

For funding purposes, all transportation projects are divided into three phases:

1. Preliminary Engineering (PE) - pre-construction work items such as planning studies, environmental documentation, design plans, right-of-way plans, and construction bid documents
2. Right-of-Way (ROW) – property acquisition
3. Construction (CST) – project implementation

Each TE project is approved for funding in one or more of these phases. Each Sponsor receives a letter notifying them of the federal TE funding award. The TE award amount may be less than the amount requested which will exclude some aspects of the project. This circumstance requires development of a revised scope of work for the project, which will be reviewed and approved by GDOT. If you have any questions concerning your funding award or project scope, contact your GDOT TE Project Manager.

The amount of federal TE funds allocated to each project is fixed and will not be increased under any circumstances. The Sponsor is responsible for any costs in excess of the awarded TE amount needed to develop and complete the approved project.

The federal TE funds are allocated as part of the Federal-aid highway program. Federal funds are made available to projects on a cost reimbursable basis, i.e., the Sponsor must incur the expense before federal TE funds are paid to the Sponsor. Procedures have been established to make payments to the Sponsor as soon as practicable to minimize cash flow problems for the sponsoring agency.

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INNOVATIVE FINANCING (TE Local Match)

Innovative financing refers to an approach that permits Sponsors greater flexibility in matching Federal TE funds. All TE projects must meet the minimum obligation of a 20 percent local contribution. In addition to local government funds, Sponsors may use sources such as private cash donations and funds from other Federal or State agencies to pay the local matching share. Other sources of the Sponsor’s local match may include in-kind contributions and donated services, materials and real property on a case-by-case basis. Federal funds from agencies of the U.S. Department of Transportation may not be used to match the federal TE funds.

To assist in taking advantage of this flexibility, the GDOT created an innovative financing methodology for the PE and/or ROW phases. This methodology allows the Sponsor to pay all costs of the PE and/or ROW phases with local funds. The Federal TE funds are then used in the other project phases. Innovative financing allows the Sponsor’s 100 percent local contribution in the PE and/or ROW phases to count toward the overall project local match obligation. This methodology is recommended for all TE projects that meet the conditions described below.

In the PE phase, the innovative financing methodology allows the Sponsor to pay all costs of the PE phase using local funds only. If the local funds are used to obtain the services of a consultant and the cost of these services will be used as a part of the local match obligation, the Sponsor must follow the requirements of the Official Code of Georgia 50-22, Managerial Control Over Acquisition of Professional Services, and GDOT TOPPS Directive 4020, Consultants/Service Contracts.

In the ROW phase, the innovative financing methodology allows the Sponsor to pay all the costs of the ROW phase using only local funds and credit those amounts toward the local matching share. The Sponsor must comply with the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, even when using only local funds for the ROW acquisition.

The amount of local funds expended for PE and/or ROW is certified by the Sponsor and made part of the TE Agreement for the ROW and/or CST phases. The certified expenditures will apply toward the Sponsor’s local match obligation. Any remaining local match obligation is paid during the other project phases. The federal TE funds are therefore reserved for the other phases of the project as identified in the project approval letter. Sponsors who do not follow this methodology will not be allowed to credit the local money spent for PE and/or ROW toward the local match obligation.

For Sponsors to participate in Innovative Financing of PE and/or ROW, the following conditions must be met:

1. The Sponsor’s TE application must identify local funding for the PE and/or ROW phases;
2. The Sponsor must submit for GDOT approval a work plan, schedule, and budget showing how the project will be accomplished using Innovative Financing for PE and/or ROW;
3. The Sponsor must execute the Audit Certification of Compliances and send in their latest A-133 Audit; and
4. The Sponsor and GDOT must jointly execute the Innovative Financing Memorandum of Understanding (MOU).

The Innovative Financing MOU is an agreement between the Sponsor and GDOT concerning the Sponsor assuming responsibility for PE and/or ROW. The MOU enables the Sponsor to apply eligible PE and/or ROW expenditures as part of the local match of the total project cost.

The Sponsor and the GDOT TE Project Manager will jointly determine whether costs associated with the PE and/or ROW phase are eligible to count towards the Sponsor’s local match. Eligible PE costs include costs of consultant selection; preparation of environmental documentation, design plans, right-of-way plans, and construction bid documents; construction contract advertisement and award; and other administrative tasks related to the project. Eligible ROW costs include property records research, relocation assistance, property appraisal, property acquisition, and document preparation.

The Sponsor must certify in the Authorizing Resolution of the TE Agreement the sum of the local contribution made by the Sponsor in the PE and ROW phases. This amount will then be credited towards the Sponsor’s local match.

ROW DONATIONS

Donated real property may be credited towards the Sponsor’s local match obligation. The credit is based on the fair market value of the land or other real property as approved by the GDOT Office of Right-of-Way. To be eligible for the credit, the real property may not be part of a current transportation facility. If the property is acquired in anticipation of the TE project, it must be acquired in accordance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, and coordinated with GDOT. Donated right-of-way is eligible to be credited toward the local match only after GDOT approves the fair market value.

DONATED SERVICES AND MATERIALS

In-kind contributions or donated labor and materials may be credited towards the Sponsor’s local match obligation. These credits normally apply during the construction phase, but in-kind contributions in other phases may be credited on a case-by-case basis. Sponsors who propose to use donated labor and materials must document the reasonable value of these donations to GDOT.

STEP-BY-STEP PROCESS FLOW

The TE Process Flow Chart outlines the major steps in implementing a TE project. This section will provide information on each step in the process.

APPLICATION APPROVED

Upon selection of an approved project, the Sponsor is notified of the federal TE funding award. This notification will include the amount of TE funding by project phase, if appropriate. Copies of the Innovative Financing MOU and the Audit Certification of Compliances will be sent with the notification of the award. The Sponsor should return these forms within 30 days of receipt.

In some cases, the federal TE award amount will be less than requested in the application. If a lesser amount is awarded, the Sponsor should immediately begin to plan what can be accomplished using the lesser amount, including a reduction in the scope of the project. When returning the executed MOU and Audit Certification of Compliances, the Sponsor must include for GDOT approval a work plan, schedule, and budget showing how the project will be accomplished.

A Sponsor’s Checklist has been developed to assist Sponsors in managing the progress of TE projects. A copy of the checklist is included in the Appendix.

AUDIT CERTIFICATION OF COMPLIANCES

The Sponsor is required to execute the Audit Certification of Compliances as part of the MOU process. By executing the certification, the Sponsor is certifying that the Sponsor with comply with the following requirements:

1. Procurement requirements of 49 CFR 18.36, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, and 23 CFR 635 Part A, Contract Requirements,
2. State audit requirements of Official Code of Georgia Section 36-81-7, Requirement of Audits, and
3. Federal audit requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.

Along with the Audit Certification of Compliances, the Sponsor is required to send in their latest A-133 Audit to ensure compliance with federal requirements. If a PE consultant contract is estimated to cost more than $250,000 a pre-award audit of the consulting firm is required to assure the firm has the appropriate accounting procedures in place.

EXECUTE MOU

The Innovative Financing MOU is a mechanism which allows the Sponsor to credit its expenditures and donated services, materials, real property toward the local 20 percent matching share of the total project cost. By signing the MOU, the Sponsor also agrees to the procedures and requirements related to the TE program.

After all parties have signed the MOU, the GDOT TE Project Manager will issue a Notice To Proceed (NTP) for PE to the Sponsor to begin the work on the TE project. The effective date stated in the NTP is very important because only those local expenditures occurring after that date can be credited to the local matching share.

If federal TE funds are to be used in the PE phase, the PE work may not begin until a TE Agreement is executed and a NTP for PE is issued by GDOT.

SELECT CONSULTANT

This step applies to Sponsors who plan to hire a consultant to develop the project concept, environmental documentation, architectural or construction plans, and construction bid documents. If the Sponsor wants the costs for obtaining a consultant to apply toward the TE local matching requirement, the Sponsor must have received a NTP for PE from the GDOT TE Project Manager as described in the previous section “Execute MOU.”

The procedure used to obtain consultant services must be in accordance with the requirements of the Official Code of Georgia 50-22, Managerial Control Over Acquisition of Professional Services, and GDOT TOPPS Directive 4020, Consultants/Service Contracts.

When advertising for consultant services, public notice of the request for proposal should be given for at least 15 days prior to the selection of the three or more most highly qualified firms. Such public notice shall be given by publication at least once in the Georgia Procurement Registry and may be given by publication in one or more daily newspapers in general circulation. The notice should include a general description of the proposed project; indicate what selection method shall be used; and the procedure by which interested persons may apply for consideration for the contract.

The GDOT maintains a list of prequalified consultants who have met minimum requirements and qualification standards by class of work. Sponsors are required to engage prequalified consultants for their TE projects whether using TE funds or only local funds for PE work.

Consultants are prequalified based on classes of work. In addition to traditional highway planning, design, and construction work, GDOT has added two classes of work applicable to TE projects – Class 3.13 Facilities for Pedestrians and Bicycles and Class 3.14 Historic Rehabilitation. Sponsors may obtain prequalification lists from the GDOT Prequalification Office at 404-656-5250 or from the Internet at:

PREPARE CONCEPT REPORT

A concept report must be completed for each TE project. The concept report documents the scope of the work to be completed using the awarded TE funds.

The concept report is used also by the GDOT to communicate information about the proposed TE project. This communication makes various offices within GDOT aware of the project, its significant design features, and its relationship to the State Highway system. This information is critical to assure that proposed improvements to the State transportation system are implemented in a coordinated manner.

The concept meeting is optional and is held at the discretion of the Sponsor and the GDOT TE Project Manager. For minor projects within or crossing GDOT ROW, the GDOT TE Project Manager and the Sponsor will discuss the need for the concept meeting to decide whether a concept meeting will be held. For projects outside GDOT ROW, a concept meeting may still be necessary if there are important issues, such as utilities, railroads, or wetlands.

The Sponsor is responsible for coordinating the concept meeting. The GDOT TE Project Manager will assist the Sponsor in identifying the appropriate GDOT staff to be invited to the meeting. At the meeting, the Sponsor should present the project concept and respond to questions. A draft concept report should be available prior to the concept meeting. Following the meeting, the Sponsor should work with the GDOT TE Project Manager to resolve outstanding issues and questions.

The Sponsor will revise the concept report as appropriate and submit it to the GDOT TE Project Manager for review and approval. The concept report should be approved before submission of the environmental documents.

The concept report form is included in the Appendix.

ENVIRONMENTAL CLEARANCE

All TE projects are required to comply with the National Environmental Policy Act of 1969 (NEPA). Environmental compliance requires documentation of the TE project environmental effects and review by applicable State and Federal agencies. Since TE projects are designed to enhance the transportation system, most TE projects do not have significant adverse environmental impacts. Therefore, compliance and review will usually be accomplished using a Categorical Exclusion (CE) finding.

Section 106 of the National Historic Preservation Act of 1966 requires all Federal agencies to consider ways to avoid or mitigate the adverse effects on historic properties whenever a federally funded project affects such properties. To implement this requirement, every TE project must be reviewed by the Department of Natural Resources, Historic Preservation Division (HPD). The worksheet and other information related to the Section 106 review are included in the Appendix. The worksheet must be completed and submitted to the GDOT Project Manager for appropriate review and coordination.